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If Consumption Growth Decreases, the Government Spending "Multiplier Effect" Means G\vec { G }

Question 46

Multiple Choice

If consumption growth decreases, the government spending "multiplier effect" means that in order to counter the recession:


A) the government cannot use fiscal policy.
B) the government is forced to use both tax cuts and increases in G\vec { G }
.
C) fiscal policy needs to raise G\vec { G }
By less than the decrease in C\vec { C }
.
D) fiscal policy needs to raise G\vec { G }
By more than the decrease in C\vec { C }
.

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